Ullmer’s share regrets on exit

National Australia Bank
’s outgoing deputy chief has admitted he is disappointed the bank’s share price is even lower than where it was when he joined in 2004 amid the fall-out from the foreign exchange trading scandal.

But
Michael Ullmer
, who will leave the bank on August 31, said the bank would benefit from “very innovative and bold" moves by chief executive Cameron Clyne which had positioned NAB ahead of its peers in facing the future.

NAB announced yesterday Mr Ullmer would step down as both deputy CEO and as a director. Also leaving the bank is Lynne Peacock, who since 2004 has been chief executive of NAB’s UK operations, Yorkshire and Clydesdale banks.

Andrew Thorburn will take her place. He started working at Clydesdale as a graduate in 1978 and rose through the ranks to become Clydesdale’s chief operating officer in 2002.

The departures of Mr Ullmer and Ms Peacock are the first among the bank’s senior executive ranks since former Australian head Ahmed Fahour quit in early 2009 after he missed getting the top job.

Mr Ullmer was brought across from Commonwealth Bank of Australia in 2004 by former NAB chief John Stewart to become the bank’s chief financial officer. He was one of several outside appointments following the bank’s disastrous foreign exchange trading scandal which cost NAB $360 million.

Reflecting on that period, Mr Ullmer said the biggest challenge was restoring the bank’s tarnished reputation among regulators, politicians, media and investors. “Certainly I underestimated how much was required to rebuilt that reputation. That’s been the most fundamental thing that’s kept my focus. When you look at where we are today, we have an incredibly strong foundation to go forward. We have restored our reputation with all those constituencies."

However he conceded the shareprice performance suggested more work was needed on the investor front. When he joined the bank NAB shares traded around $27. Yesterday they closed at $24.35. “In 2004 if you said to me ‘Michael where to you think we’d be in 2011?’ I would have absolutely said we’d be leading the pack and that would be reflected in our share price," he said. “The fact of the matter is it’s not and that’s something of a disappointment. But the foundations we’ve put in place are incredibly robust."

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Ms Peacock is believed to have been keen to step down for some time. The beleaguered UK business gets described by NAB as a good bank in a bad economy and Ms Peacock is credited by analysts as having improved its comparative performance. However low interest rates and government budget cuts continue to weight the business down and NAB is under pressure to lift profits or find a way to sell out.

As NAB waits for banking conditions in the UK to improve, Mr Thorburn will be looking at bidding for branches being sold for Lloyds as well as Northern Rock, which is being privatised having been taking over by the UK government in 2008.

Mr Ullmer said his decision to depart reflected that many of his roles, such as overseeing the integration of JBWere and US bank Great Western, had come to an end. He became deputy CEO in 2007, serving beside Mr Stewart and held onto the role when Mr Clyne took the bank’s helm in January 2009. Seen as a possible successor to Mr Stewart, he publicly ruled himself out of the race but was encouraged by the bank’s board to remain in his role.

He said Mr Clyne had a rare combination of maturity and youthfulness that made him attuned to where the bank’s customers and employees were focused.

“Cameron has led some very innovative and bold moves, whether that’s around our fair value agenda in personal banking . . . or our fee for service model [in the wealth management arm]. He’s cutting a different approach but one which absolutely anticipates where the consumer is heading and where regulators and politicians are headed. I think we’re ahead of the curve."